Certified Application Counselor Practice Test

What is balance billing?

1. Billing the consumer for adjusted premiums

2. Providing a detailed bill to consumers with discounts

3. Charging consumers the difference between billed charges and allowed amounts

4. Billing consumers for non-insured services only

The correct answer is: Charging consumers the difference between billed charges and allowed amounts

Balance billing refers to the practice of charging consumers the difference between what a healthcare provider bills and the amount that is allowed or reimbursed by the insurance company. This situation typically arises when a provider is not in the insurance network, allowing them to bill for the total charge rather than just the negotiated rates. In this context, if a provider charges $500 for a service and the insurance company allows only $300 for that service, the provider could balance bill the consumer for the remaining $200. This practice can lead to unexpected costs for consumers, particularly if they are unaware that their provider is out of network. Understanding balance billing is crucial for consumers as it highlights the potential financial implications of receiving care from out-of-network providers and emphasizes the importance of verifying a provider’s network status before receiving services.